How to Map Out Your Digital Transformation
Summary.
If digital transformation is supposed to be meaningful and lasting, companies must think about changes in products and processes more than changes in technology. But many companies struggle to look past the shiny promises that usually accompany new technologies. As a result, they dedicate too many resources and too much attention to the technology side of digital transformation projects. One approach to counter this imbalance is to think of digitalization as business model innovation rather than technology-related change. The author shows how one simple, well-known tool — the business model canvas — can facilitate the necessary shift in perspective.
At the start of the pandemic, businesses around the globe found themselves exposed to an unexpected boost in digitalization. Those who promised to keep the wheels turning were given carte blanche to do whatever it took to keep a company running. But as many now return to the office, they also realize that the digitalization lodestar is beginning to fade. Where investment priorities were clear early in the pandemic, companies now face the same uncertainties regarding digitalization as they faced before it.
At the heart of this uncertainty is a simple question: How do leaders make sure that digitalization makes a purposeful and sustainable impact on the business — and doesn’t just follow the next tech hype?
Behind this question stand legions of digitalization leaders who have tried to figure out what the latest trend in tech means for them — from AI and blockchain to quantum computing. But while many of these trends are hyped initially, executives have become all too familiar with the hype cycle’s “valley of tears”: the sobering phase after the initial hype when impacts and benefits remain vague and many projects are abandoned. Only a few manage to pull through and reach the “plateau of productivity” where digital investments start to make a difference.
If digital transformation is supposed to be meaningful and lasting, companies must think about changes in products and processes more than changes in technology. But many companies struggle to look past the shiny promises that usually accompany new technologies. As a result, they dedicate too many resources and too much attention to the technology side of digital transformation projects.
One approach to counter this imbalance is to think of digitalization as business model innovation rather than technology-related change. Over the past three years, I’ve been working with dozens of teams who made that shift. They were faced with digitalization challenges across a wide range of industries (e.g., consumer goods, health care, education, construction, finance) and firm sizes (from small and medium enterprises to larger, international organizations).
While their motivations and goals differed, the teams shared the experience that envisioning business model change — whether in response to digital disruption or to innovate digitally themselves — helped them see technology in context and better understand what measurable changes to expect. Across the teams, one simple, well-known tool turned out to facilitate the necessary shift in perspective: the business model canvas.
